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Driven By 5G, IoT Innovations, TE Connectivity Senses New Breakout After 215% Run

What do smartphones and smart homes, electric vehicles, aircraft, medical devices, industrial automation and 5G technology all have in common? Connectivity. And Switzerland-based TE Connectivity (TEL) ties them all together with advanced sensors and Internet of Things (IoT) innovations.

Soon after its IPO in July 2007, TEL stock crashed as the financial and housing markets collapsed. But since the beginning of a new bull market in March 2009, TE Connectivity has seen its share price soared as much as 1,975% before pulling back in August of this year to begin forming its current chart pattern.

Since the housing market meltdown in 2007, TE Connectivity has also weathered the coronavirus crash. TEL stock rose 215% off its pandemic lows before beginning to form its current base.

The company and its stock have clearly tapped into the boom in smart technology, 5G and IoT trends, as well as the demand for the sensors and connectivity it drives.

TE Connectivity works with technology leaders and innovators to develop advanced sensors used in a wide range of industries. From energy, aerospace and medical devices, to intelligent buildings, 5G networks and EVs, TE Connectivity develops the connective infrastructure that makes today's "smart" world possible.

TE Connectivity: The Biggest 5G, EV, IoT Firm You've Never Heard Of?

While not a household name in the U.S., TE Connectivity is no small player. The company generated $12.2 billion in revenue in 2020, and posted $3.85 billion in sales last quarter.

Leading mutual funds have certainly taken notice. In addition to TE Connectivity posting eight quarters of rising fund ownership, 69 fund with an A+ rating from IBD have reported owning TEL stock.

As it has on the revenue side of the ledger, TE Connectivity has rebounded from several quarters of unimpressive performance on the earnings front. Including two quarters that showed a loss, the company has now posted four quarters of improving EPS results. In its latest report, TE Connectivity delivered 203% earnings growth.

The company is on tap to report on Oct. 27. Analysts expect 41% EPS growth for Q3 and a 52% gain for the full year.

TEL Stock Trying To Connect With New Buy Point

Throughout its big climb off the coronavirus lows, TEL stock has found support along its 10-week moving average. But as it works on its current still-early stage flat base, it's trading below that benchmark line.

After slipping below it Tuesday, TE Connectivity is testing support at its 21-day line as it tries to shake off selling pressure and close in on a 153.63 buy point.

The relative strength line for TEL stock has been moving sideways but remains within striking distance of a new high. See if a strong earnings report later this month can connect the stock to its new potential buy point. And look for heavy volume on any breakout attempt to show conviction for a continued run for TE Connectivity.

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